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ELCDismissed· [2018] KEELC 4019 (KLR)

S.S. Investments Limited & another v NIC Bank Limited [2018] KEELC 4019 (KLR)

Environment and Land Court of Kenya
31 January 2018
POP.J.O. Otieno
1,569 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court allowed a lender to sell charged land because it properly served the borrower a statutory notice before the auction.

What this practically means

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Executive summary

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The parties, by a consent recorded on 4/5/2017, agreed that the suit proceed by way of case stated on a single question: whether the defendant had complied with the statutory provisions in seeking to realize the security given by the plaintiff. The plaintiff, a borrower whose charged properties (Mombasa Block XX/95 and L.R. No. MN/1/5207) were advertised for sale, argued that the defendant chargee advertised the security before serving the mandatory statutory notice under Section 90 of the Land Act, and sought an injunction to stop the sale and a declaration that the auction was null and void. The plaintiff's principal director and majority shareholder died on 10/1/2017, and the plaintiff contended it needed time to put its affairs in order. The defendant asserted that default occurred, that statutory notices were issued on 13/01/2016, notices to sell on 30/5/2016 and 19/6/2016, and redemption notices on 19/8/2016, and that the plaintiff was simply delaying while the debt stood at Kshs.53,399,512.50 and USD19,367,142.84 as at May 2017. The court, confined to the pleadings and witness statements, found the statutory notices of 11/01/2016 disclosed the nature of default, the remedial action required and the consequences of non-compliance within 90 days, and that service by registered post and in person was evidenced by affidavits of service. The court held the defendant complied fully with Section 90 of the Land Act, found the plaintiff's challenge wholly misconceived, dismissed the suit and awarded costs to the defendant. Judgment was delivered at Mombasa on 31 January 2018 by P.J.O. Otieno, J.

Key legal issues

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01

Whether the defendant chargee complied with Section 90 of the Land Act before advertising the charged land for sale

Holding

Yes - the statutory notices of 11/01/2016 were in full compliance with the statutory requirements and were duly served, so the exercise of the statutory power of sale was lawful

Reasoning

The court held that the legality of the charge instruments and the fact of default were not disputed, leaving only compliance with Section 90. The notices dated 11/01/2016 disclosed the nature and extent of default, the remedial action required and the consequences of non-compliance within 90 days, and were addressed to the registered proprietors. Service by registered post was evidenced, and subsequent notices of intention to sell were served in person as shown by affidavits of service.

p. 3

Legal principles established

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  • A chargee who issues a statutory notice that discloses the nature of default, the action required to remedy it and the consequences of failure to act within 90 days, and serves it, complies with Section 90 of the Land Act before exercising the statutory power of sale.

Court orders

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  1. 1.Plaintiff's suit dismissed with costs to be paid to the defendant by the plaintiff

Authorities

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Legislation

  • Land ActSection 90(1), (2), (3)
Jurisdiction invoked
Original civil jurisdiction; suit proceeded by consent by way of case stated (parties recorded a consent on 4/5/2017)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "S.S. Investments Limited & another v NIC Bank Limited [2018] KEELC 4019 (KLR)", Case Analysis (2018). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/4019/eng@2018-01-31

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.